With the increasing value of properties, people have become obsessed to invest in residential or commercial property.
Earlier the commercial property was only bought by professional institutional investors like insurance companies and pension funds. But now in recent years, a new lot of investors have emerged by the name of smaller private investors. They have good experience in buying industrial units for rent and they have come out in the market with a huge uproar. For them, investing in industrial units is the perfect step for development.
So, lets us see what are advantages of investing in industrial units?
Primarily, the investors can earn a higher rate of income in industrial units than the residential property. Even though the units come with a lower rate of capital growth, still for them it’s a beneficial deal. It is still beneficial deal for them because on an average the total returns on the commercial investment have been 20%.
The second advantage is the duration of the tenancy agreement. In a house or a flat the common period of agreement is for 6 months, but on a commercial unit the agreement will be anything between 5-15 years. With this duration the investor will get an assured return for a longer period. The other added advantage with this is that the longer duration leases are reviewed after every 3-5 years to ensure that the property rates are in sync with the price inflation.
The level of protection is also more, as if by chance the tenant does not pay the rent as mentioned in the contract. This happened because the commercial leases are for a contractual period as opposed to the residential properties that are regulated where the owner has more protection.
The industrial units for rent may not be that appealing for the investors when compared to residential properties, but they can offer an assured return with consistent level of capital growth. The length of contract is also far better than the residential ones.
Investors should make a decision after a lot of thought and contemplation. Even if the process is time consuming, still they must be careful and seek an informed decision. There are a lot of Commercial Property in Lancashire which you can invest in as they offer a higher rate of return too. Get in touch with some dealers who will provide you with a good quote.
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